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• Bloomberg: Kaufmann Fund Sees India as Future for Top Returns
  

Federated Kaufmann Fund’s Lawrence Auriana and Hans Utsch, whose bets on the fastest-growing U.S. companies made them top-ranked managers over the past two decades, say India is the future.

“We’re always looking for growth, and the growth right now is going on in India and China,” Auriana said in an interview in his New York office. “The valuations aren’t as extreme in India as they are in China.”

Auriana said he sees “terrific buys” in industries that have suffered losses, including retailing, financial services and housing. He declined to disclose those possible investments.

• Economist: All fall down?

AMERICA’S big bond insurers, which have underwritten some $2.4 trillion of private and public-sector bonds, usually go about their business largely unnoticed. But now they are looking distinctly wobbly they have started to attract attention. If one or more of them were to topple over, there will be a huge knock-on effect on banks and other financial institutions that rely on their guarantees.

Bond insurers in effect “lend” their top-notch ratings to lower-quality debt, raising its value in the eyes of investors. Any cut in those ratings may make it impossible for the bond insurers to take on new business and would reduce the value of the securities they have already underwritten.

• McKinsey: The New Power Brokers: How Oil, Asia, Hedge Funds, and Private Equity Are Shaping Global Capital Markets

Chapter 1: The New Power Brokers

MGI details how the rising influence of the four players is jointly shaping global financial markets. Their combined assets grew from just $3.2 trillion in 2000 to an estimated $8.7 trillion–$9.1 trillion in 2006. The factors fueling their growth will persist for at least another five years and, even under conservative assumptions, all four power brokers will grow in size and influence in the years ahead.

Launch this chapter (PDF - 1.68 MB)

Chapter 2: Petrodollars: Fueling Global Capital Markets Petrodollars are the largest of the four power brokers with between $3.4 trillion and $3.8 trillion in foreign financial assets at end-2006. Assuming oil at $50 per barrel, their assets would grow to $5.9 trillion by 2012. Launch this chapter (PDF - 1.75 MB)

Chapter 3: Asian Central Banks: The Cautious Giants Asian central banks had $3.1 trillion in foreign-reserve assets at the end of 2006 from just $1 trillion in 2000. Assuming flat or declining current-account surpluses in Japan and China, Asian reserve assets will grow to $5.1 trillion by 2012, with average annual investments of $321 billion per year in global capital markets. Launch this chapter (PDF - 1.80 MB)

Chapter 4: Hedge Funds: From Mavericks to Mainstream Hedge fund assets under management have tripled since 2000, reaching an estimated $1.7 trillion by mid-2007 on the back of record inflows and high returns. Including leverage used to boost returns, the industry’s assets rise to as much as $6 trillion—which would make hedge funds the biggest of the four new power brokers. In MGI’s base case, hedge fund assets could reach $3.5 trillion by 2012—and between $9 trillion and $12 trillion including leverage. Launch this chapter (PDF - 1.76 MB)

Chapter 5: Private Equity: Eclipsing Public Capital Markets? Despite the intense public focus it attracts, private equity is the smallest of the four new power brokers, with $710 billion in investors’ capital at the end of 2006. Even with growth rates slower than in the past few years, MGI projects that global private-equity assets under management could reach as much as $1.4 trillion by 2012. Launch this chapter (PDF - 1.75 MB)

Looks like good stuff - haven’t gone through it yet.

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